EU electricity market rules deal wraps up Clean Energy package

After marathon negotiations, new rules for making the EU’s electricity market work better have been provisionally agreed by negotiators from the European Council, the Parliament and the Commission in the early hours of December 19.

This concludes the political negotiations on the Clean Energy for All Europeans package and is a major step towards completing the Energy Union and combatting climate change.

“Today’s deal marks the completion of negotiations on the Clean Energy for All Europeans package, putting the EU in the lead in terms of rules to accelerate and facilitate the clean energy transition,” Climate Action and Energy Commissioner Miguel Arias Cañete said.

European Commission Vice President for Energy Union Maroš Šefčovič said in a tweet that by agreeing to new rules four the EU electricity market, a last piece of the Clean Energy For All Europeans falls into place. “A major step towards completing the Energy Union! Excited to see we’ll enter the next decade with the legal framework supporting this profound modernization journey,” Šefčovič added.

Negotiators were able to reach a political agreement on the new Electricity Regulation and Electricity Directive, the Commission said, explaining that this agreement follows previous agreements on the Governance proposal, the revised Energy Efficiency Directive, the revised Renewable Energy Directive, the Energy Performance in Buildings Directive and the Regulations on Risk Preparedness and the Agency for the Cooperation of Energy Regulators (ACER).

“Today’s agreement on the future electricity market design is a vital part of the package. The new market will be more flexible and facilitate the integration of a greater share of renewable energy. An integrated EU energy market is the most cost-effective way to ensure secure and affordable supplies to all EU citizens. The new rules will create more competition and will allow consumers to participate more actively in the market and play their part in the clean energy transition,” Cañete said.

“I am particularly pleased that we agreed on a balanced approach to limit capacity mechanisms and reconcile security of supply with our climate objectives. Capacity mechanisms will not be used as a backdoor subsidy of high-polluting fossil fuels as that would go against our climate objectives,” he added.

Commenting on the agreement, WindEurope noted that transmission System Operators (TSOs) will also have to report on all re-dispatch actions. They will also have to follow recommendations from energy regulators on how to make re-dispatching more efficient and avoid the curtailment of renewables. This will help give transparency on any ‘must-run obligation’ agreements with conventional power plants that are crowding out renewables from the grid.

“It’s good that we’ve finally got a deal on the shape of Europe’s electricity market for the next decade,” WindEurope CEO Giles Dickson said, adding that the European Commission has said that renewables will be 55% of Europe’s electricity demand by 2030 and 80% by 2050. And wind energy will become the number one source of power in Europe by 2027, according to the IEA. “We need a properly functioning electricity market for this to happen. Because it’ll make it cheaper and easier to integrate more renewable,” Dickson said. “Overall, this deal is a good step forward for the energy transition in Europe. It will help make Europe’s electricity market ready for the ongoing expansion of renewables. And it will help ensure consumers can benefit from cleaner and more affordable electricity.”

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